1.3.5 Marketing Strategy

• • The product life cycle describes the different stages a product goes through from its conception to its eventual decline in sales
• stages of life cycle

  development, introduction, growth, maturity, and decline
• Companies should tailor their marketing strategies and manage their cash flow to ensure long-term profitability and success
• Development stage

  • focus is on designing and developing the product
  • business usually incurs high costs
• Implication of development stage

  • Cash flow is usually negative as company is investing heavily in product without generating revenue
  • marketing strategy - focused on creating awareness and generating interest in product
• Introduction stage

  • when the product is launched
  • slow sales growth as product is new & unknown to most consumers 
• Implication of introduction satge

  • Cash flow is usually negative - high costs for promotion, advertising & distribution
  • Marketing- focused on creating awareness and generating interest 
• Growth stage

  • sales begin to increase rapidly
  • focus shifts to building market share and increasing production tomeet the growing demand
• Implication of growth stage

  • Cash flow turns positive  as sales revenue increases and costs are spread out over larger volume of production
  • marketing -  differentiate the product from competitors & build brand loyalty
• Maturity Stage


  slowing sales growth as the product reaches its peak in terms of market penetration
• Implications of maturity stage

  • Cash flow - positive as sales revenue increases & costs reduced by eos and efficient production processes
  • marketing - maintain market share & increase profitability by cutting costs & finding new markets
• Decline stage

  • sales begin to decline as the product becomes obsolete or is replaced by newer products
  • focus shifts to managing the product's decline and reducing costs
• Implications of decline stage

  • Cash flow turns negative as sales revenue declines & costs associated with the product's decline increase
  • marketing - involve discontinuing the product, reducing its price to clear inventory, or finding new uses for the product
• Product related extension strategies

  • Involves changing or modifying the product to make it more appealing to customers
  • Product improvements new features added
  • Line extensions e.g. Coca-Cola introduced Diet Coke and Coke Zero as line extensions
  • Repositioning 
• Promotion related extension strategies

  • changing the marketing and promotion of the product to extend its life cycle
  • Changes to advertising 
  • Price promotions - discount prices significantly boost sales
  • Sales promotions - loyalty program where customers earn a free drink for every six consumed
• • Boston Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
• • The matrix classifies products into four categories based on their market share and the market growth rate
  • Cash Cow
  • Problem Child/Question Mark
  • Star
  • Dog 

  
• Cash cow


  products with a high market share in a mature market
• Implication of cash cow

  • positive cash flow but low growth potential
  • invests minimal resources in cash cows as they are seen as stable sources of income
  • Marketing - focus on maintaining market share & profitability
  • valuable assets & can be used to fund the development of new products
• Problem child/ question mark

  • low market share in a high-growth market
  • products have potential to become stars if company invests in their development
• implications of problem child/ question mark

  • negative cash flow as businesses invest in problem child products to increase their market share and turn them into stars
  • If investment doesn't result in growing, the business may discontinue the product
  • Marketing- increasing their market share and brand recognition
• Star

  • high market share in a high-growth market
  • invests in stars to maintain or increase their market share
• Implication of stars

  • generate significant positive cash flow and have the potential for continued growth
  • Marketing- building brand recognition, increasing market share, and maintaining profitability
  • valuable assets and the business should focus on maximising their potential
• • Dog products have a low market share in a low-growth market
• Implications of Dog

  • generate little revenue and have no growth potential
  • often move away (divest) from these 
  • Marketing- minimal or zero
• marketing strategy in mass market

  • focus on building brand awareness and appealing to a broad audience
  • advertising done on T.V, radio & print ads
  • messages are simple and goal is to create a strong brand identity that resonates with a large segment of the population
• Marketing Strategy in niche market

  • Marketing focus on targeting a specific segment of the population & building relationships with them
  • advertising is more targeted & may use social media
  • messages - detailed and  include technical information that's relevant to specific needs of target market
• Marketing strategy in B2B

  • Focuses on selling products to other businesses
  • emphasis on building relationships with other businesses & how your product can help them be more successful
  • Advertising - case studies that demonstrate your value
  • messages - more technical and focus on features and benefits relevant to other businesses
• marketing strategy in B2C

  • focuses on selling products/services directly to consumers
  • marketing - emphasis on building brand loyalty & creating positive customer experience
  • Advertising - social media or influencers
  • messages -more emotional & focus on the lifestyle benefits
• • Customer loyalty drives repeat purchases which helps the firm to reduce marketing costs when launching new products
• Brand Loyalty - Customer Service

  • positive customer service experience =  more likely to return and recommend the business to others
• Brand Loyalty - Loyalty Cards

  • offer rewards or discounts for frequent purchases
  • repeat purchases
• Brand Loyalty - Saver schemes

  • offer discounts or special pricing for customers who save money with them
  • helps customers gradually save up some money that can be used at periods when food bills are usually higher